The Darkside of Corporate Venture Capital: A Theoretical Framework

Research output: Chapter in Book/Report/Conference proceedingConference abstract in proceedingsResearchpeer-review

Abstract

This paper develops a theoretical model where a startup seeks financing from an investor in order to develop an idea into a commercial project. Investors that possess valuable complementary assets can contribute the most to the success of the startup but also have the strongest incentives to misappropriate the idea. The startup chooses not to contract with these investors when (i) IPRs and other protection mechanisms are weak, and (ii) the initial upfront investment is limited relative to the value of the project. Large private benefits to the investor, e.g., in the form of learning benefits, decrease the misappropriation incentives and result in better matches between startups and investors.

Original languageEnglish
Title of host publicationProceedings of the Eighty-second Annual Meeting of the Academy of Management
EditorsSonja Taneja
Number of pages1
Place of PublicationBriarcliff Manor, NY
PublisherAcademy of Management
Publication date2022
Pages2500
DOIs
Publication statusPublished - 2022
EventThe Academy of Management Annual Meeting 2022: Creating a Better World Together - Seattle, United States
Duration: 5 Aug 20229 Aug 2022
Conference number: 82
https://2022.aom.org/

Conference

ConferenceThe Academy of Management Annual Meeting 2022
Number82
Country/TerritoryUnited States
CitySeattle
Period05/08/202209/08/2022
Internet address
SeriesAcademy of Management Proceedings
ISSN0065-0668

Cite this